When a marriage or de facto relationship ends, one of the most significant concerns for both parties involves the division of property. It can be a complex process, often causing stress and uncertainty. To ease these concerns, it’s essential to understand the process: How is property divided in a divorce?
How Is Property Divided in a Divorce, and How Do We Define ‘Property’?
When a couple separates, their assets and liabilities form what is referred to as the ‘property pool’. This can include physical assets like real estates and vehicles, as well as other financial assets and liabilities such as money in bank accounts, shares, superannuation, business interests and debts.
Step-By-Step Guide On How Is Property Divided In A Divorce
Step 1: Identifying the Property Pool
Identifying the ‘property pool’ is a fundamental first step in determining how property is divided in a divorce.
The property pool comprises all assets and liabilities of both parties, regardless of when they were acquired.
Assets include real estate, vehicles, investments, and personal possessions, while liabilities might consist of mortgages, loans, and credit card debts. In some situations, it may be necessary to get assets and liabilities valued if the value is in dispute or the parties are unsure of its true worth. This can help to ensure the accuracy of the property pool.
Honesty is crucial during this process. Both parties must fully disclose their financial circumstances to achieve a fair and equitable division. Failure to do so can result in legal consequences and potential reassessment of the settlement.
Step 2: Assessing Contributions
Assessing contributions is a pivotal part of how property is divided in a divorce family law context. Once you have an accurate understanding of the assets and liabilities in the property pool, you then need to determine the contributions of the parties throughout the relationship, as this will influence the property settlement. It involves reviewing both financial and non-financial contributions made by each party.
Financial contributions may include income earned during the marriage or assets, and superannuation brought into the relationship.
Non-financial contributions, often overlooked, are equally important. They encompass roles like homemaking, childcare, and any efforts towards improving or maintaining the property.
The assessment of contributions isn’t just about monetary value; it acknowledges the various roles and efforts of both parties throughout the relationship.
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Step 3: Considering Future Requirements
The third step in how property is divided in a divorce family law context involves considering the future requirements of each party.
This anticipates their capacity to support themselves post-divorce. Factors like age, health status, earning potential, and responsibilities such as caring for dependent children play a vital role.
For example, a spouse who has sacrificed career opportunities to focus on raising the children, and running the household, may require more financial support as their earning capacity is likely to be lower. Likewise, health issues affecting future earning ability or the sole care of children may necessitate a larger property share.
This stage ensures both parties can reasonably move forward financially after the divorce.
Step 4: Fairness and Equity
The final step in determining how property is divided in a divorce family law context focuses on fairness and equity.
The division isn’t automatically a 50/50 split; the court strives for a just and equitable outcome. This means considering each party’s contributions (both financial and non-financial), as well as their future needs.
Factors such as the ability to earn, age, health, and care of dependent children significantly influence this decision. The goal is to reach a settlement that, considering all circumstances, is fair and allows both parties to move forward post-divorce with financial stability.
Husband Aims for 70/30 Property Settlement
Recently, we assisted our client with his property settlement matter. The couple had been married for 3 years, and our client had been the primary financial provider throughout the relationship.
At the start of the relationship, he had two investment properties and had contributed significantly financially throughout the marriage. Our client was understandably distressed when his wife demanded a 50/50 property settlement. We worked with our client to carefully review the assets and liabilities, as well as the parties’ contributions.
Through tough negotiations, we successfully advocated for our client’s interests. Considering the circumstances, the court decided in our client’s favour, granting a 70/30 property settlement ensuring an equitable division of property that reflected our client’s significant contributions.
Need Advice on How Is Property Divided In A Divorce?
Walker Pender Group is here to help. With our expert legal advice and dedicated representation, we’ll advocate for your interests and strive for a fair division. Contact us today to secure a brighter financial future post-divorce.
